© Reuters. FILE PHOTO: Britain’s Chancellor of the Exchequer Rishi Sunak leaves Downing Street, in London
LONDON (Reuters) – British finance minister Rishi Sunak will announce tens of billions of pounds of infrastructure investment next week, targeted at meeting the government’s promise to address imbalances between different regions.
Sunak’s Nov. 25 spending review will set how much money government departments have to spend over the next year.
But the headline figures on investment are likely to be dwarfed by forecasts showing public borrowing at its heaviest since World War Two.
The coronavirus pandemic has blown a 200 billion pound hole in Sunak’s financial plans, forced him to abandon his aim for a four-year spending plan in favour of a much shorter programme and left big questions about how it will all be paid for.
Nevertheless, the 40-year-old former Goldman Sachs (NYSE:) banker will highlight infrastructure investment as the way to ‘level up’ across the country – addressing the central promise of Prime Minister Boris Johnson’s 2019 election win.
“We are absolutely committed to levelling-up opportunities so those living in all corners of the UK get their fair share of our future prosperity,” Sunak said in a statement.
Britain’s economy shrank by 20% between April and June, more than any other major economy, and it has been slower to recover. The Bank of England has pencilled in an 11% fall in GDP for 2020, a drop last seen centuries ago in 1709.
Sunak will announce a new infrastructure strategy, new priorities for the trade, transport housing and education departments and changes to rules that determine which projects go ahead. All are designed to better spread economic benefits across the country.
Without listing specific projects, the finance ministry said the package would be “a massive down-payment on a number of flagship infrastructure programmes, including fibre broadband, flood defences and key transport schemes.”
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